The mere fact that this rescue package will provide loan guarantees to the very countries that boast the largest welfare states and can’t afford to pay for them probably suggests that the loan guarantees will guarantee more welfarism.

There’s a lot of talk about belt-tightening and spending cuts. But where’s the enforcement mechanism? No one knows. This is the Achilles’ heel of the whole European Union experiment. The monetary discipline has now been broken while the sought-after fiscal discipline is still broken.

If the trillion-dollar European package succeeds in calming lending markets and stopping an outright credit freeze-up, that’s good, at least in the short run.